Building a repeatable acquisition model
Sustained buy‑and‑build success comes from the deliberate creation of an acquisition strategy that prioritises efficiency, consistency, repeatability and pace. The more the whole approach, from first contact with a prospective target, is designed and executed with the purpose of being duplicable on a deal-by-deal basis the higher the likelihood of achieving the strategic objectives.
The most effective repeat acquirers invest in standardised processes and documentation, well-resourced internal deal support and establishing clear house positions coupled with decision‑making guidance and authority, then adhere consistently (as far as is possible) with that playbook. Deals will always have their particular points and quirks. Creativity and flexibility are as essential in mid-market M&A as in any part of the transaction marketplace, but investing in a coherent playbook, does bear dividends in multiple acquisition strategies.
It starts with a solid platform. Good data, clear KPIs, aligned sales incentives, and a management team that knows what it’s trying to build. Strategy and clarity of vision are critical, otherwise you just end up chasing deals rather than building something coherent.”
Robin Lawson, Bridgepoint
It is also important to recognise that a mid-market by-and-build program will involve a high percentage of transacting with privately owned, often owner-managed businesses.
And reputation also plays a decisive role. Targets, advisers and management teams talk. Acquirers known for moving decisively, honouring agreed timelines and avoiding late‑stage re-trading will find that future deals become easier to source and execute. Over time they also develop a bank of ambassadors, in sellers and management teams who have enjoyed a good deal and post-deal experience, who will be invaluable in spreading the right message, demonstrating credibility and ultimately performing a key sales role.
Finally, attention to integration and bandwidth to achieve it is critical. Acquirers underinvesting in central functions (core portfolio company management, finance, HR, systems, AI, compliance and governance) can find that execution slows as scale increases but also that asset value is eroded as lack of integration is exposed. There is a model which involves rapid acquisition and consequential EBITDA growth without thorough integration, which can be workable where exit to a more well-resourced acquirer is achieved early enough in the cycle, but that strategy should be handled with care.
You can’t just buy a business and impose your systems, you need to explain the ‘why’ and bring people with you. These businesses are still very dependent on founders and operational leaders. If you lose key people, the value is at risk.
Jose Rodriguez, QPE